Tezos Foundation May Have Been Rescued by Savvy Portfolio Management

Researchers at the crypto data analytics firm Messari have been delving into the second biannual update from the Tezos Foundation. Most notably, the report reveals that the foundation holds a large amount of fiat capital and has taken an active approach to portfolio management.

Tezos Shifts Away from Large Cryptocurrency

Messari researcher Wilson Withiam added that the foundation has dialed back its exposure to cryptocurrencies by liquidating around 7,500 bitcoins and adding more conservative investments. A snapshot of the portfolio just after the 2017 token sale shows that 63% of its holdings were in BTC with the remainder in ETH.

.@TezosFoundation holds a massive amount of capital ($635M) per its latest biannual report, but what stands out is its active approach to portfolio management

The foundation dialed back its exposure to crypto, liquidating ~7,500 BTC and adding more conservative investments

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— Wilson Withiam (@WilsonWithiam) March 31, 2020

The first biannual update reported that almost all ETH holdings had been liquidated and BTC exposure was reduced to 61% while its total value had increased by 175%. The latest update shows that BTC exposure has now been reduced even more to just 47%. Stability funds and fiat holdings represent 24%, while another 23% is in its own XTZ tokens. Ethereum and other crypto assets make up around 6% of the portfolio according to the report. Withiam added that it is possible the foundation chose to offset its increased exposure to XTZ, which has seen a 55% decrease in value since hitting an all-time high at the end of February. The foundation also added an extra 10.6 million tokens collected via baking rewards. The reshuffling of the portfolio has paid off over the past month or so while the digital asset and traditional markets alike have plummeted. This type of restructuring could possibly have saved many other crypto projects in 2018 when the bear market battered many by over 90%.

Prices in 2020

The Tezos Foundation may have played its cards well in respect to its portfolio management, but that hasn’t prevented major losses for XTZ. There have been no survivors from the COVID-19 economic crash — Tezos included. From its 2020 high of $3.83, XTZ dumped 68% below $1.20 before making a marginal recovery. The news is not all bad though as Tezos is one of the few crypto assets that are still up since the beginning of the year. XTZ is currently trading at almost 18% higher than its January 1 price of $1.35 and it is likely to be one of the first to recover when normality finally returns to the world.